Sands scraps loan plan for Macau expansion
Posted: 20 October 2008 1608 hrs

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HONG KONG: The global banking crisis has forced US gaming firm Las Vegas Sands to pull plans to raise 5.25 billion US dollars in loans to fund its aggressive expansion strategy in Macau, a report said Monday.

The firm - which operates the giant Venetian casino in the southern Chinese city - has dropped the scheme following weak appetite among lenders, the South China Morning Post said, citing unnamed sources.

"Right now it is a pulled deal. It will come back when they cook up a new shape and new price," a source said, according to the report.

The report said the deal could resurface in January.

"It's as dead as a dodo right now, but will be back at the right time," said a source with knowledge of the transaction, according to the Post.

Sands, headed by billionaire Sheldon Adelson, proposed the move to raise 7 billion dollars six months ago, but after a cool response from potential lenders dropped the target to 5.25 billion, the report said.

"It was still too large and the banks were offering to lend with only limited creditability. Any kid on the street knew they did not have the balance sheets," said a banker who walked away from the loan, according to the report.

The banks who were instructed to arrange the loan included Lehman Brothers, which went bust last month, and Citigroup and Goldman Sachs, who have both faced liquidity issues.

Sands wanted the cash to complete the construction of a massive 6,400-room casino resort complex across the street from the Venetian, along a piece of reclaimed land called the Cotai Strip.

The project would include a new Sheraton, Shangri-La, Traders and St Regis hotels as well as serviced apartments.

Macau's gaming sector, which has boomed since the market was liberalised in 2002, has showed its first signs of slowdown in recent months, mainly due to increased restrictions on visitors from the mainland.

- AFP/yt